Dealership franchise consolidation means that smaller car dealerships are joining together or being bought by bigger companies, so there are fewer separate places to buy cars.
The automotive development cycle is how long it takes to make a new car, from the first idea to when you can buy it. It usually takes a lot longer than making other things.
The Hyundai Genesis is a fancy car made by Hyundai that tries to compete with more expensive luxury cars. It has lots of nice features and is designed to be comfortable and powerful. People talk about it because Hyundai is trying hard to sell more of these cars through their dealers.
Artificial intelligence means computers inside cars that can help drive or make decisions. Some cars use this to help drivers or keep the car working well.
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Welcome to Daily Drive for Monday, February 23rd, 2026.
I'm Kellan Walker in Las Vegas.
Today on the show, Trump's new tariff has a key carve-out for the auto industry.
Stellantis braces for its first loss since its founding five years ago, and there's
a surprising trend in dealership franchise consolidation.
Plus, Alex Partners, Dan Hirsch explains why auto executives are looking over their shoulders
as industry disruption hits record levels.
It really emphasizes how different the automotive development cycle is than other consumer goods,
even other consumer derivatives.
Let's run through all the news you need to know to keep up in the auto industry.
President Trump has issued a new 15% global tariff after the Supreme Court ruled many
of its previous import taxes are illegal.
But there's good news for the auto industry.
Vehicles, parts, steel, aluminum, and copper are exempt.
Those goods remain under separate tariffs issued under different legal authority.
The exemption is a relief for automakers and suppliers who lobby to maintain the status
quo.
According to PWC, the industry paid at least $8.6 billion in duties the court now deems
unconstitutional.
Stellantis is about to report its first annual loss since its 2021 formation.
The result is driven by a staggering 22 billion euros in write downs.
The automaker says those charges stem from an overly ambitious EV strategy under former
CEO Carlos Tavares.
They include canceled electric models like the Ram 1500 BEV, scaled back EV supply chains,
and higher warranty costs.
The write downs far exceed analyst expectations, sending Stellantis stock down more than 25%
when announced earlier this month.
Current CEO Antonio Filosa calls it a reset, refocusing the company on customer demand rather
than regulatory targets.
He says Stellantis will return to profitability this year.
And our new automotive news dealer census shows automaker efforts to shrink networks
are paying off in an unexpected way.
The US has nearly the same number of dealerships as a year ago, just 11 fewer.
But automakers had 1.5% fewer franchises within those stores as of January 1st.
Single brand dealerships grew more than 1% to 13,351 locations.
Buick lost 180 stores as its buyout program wrapped up.
Lincoln dropped 43 dealers as it continues network consolidation, and Jaguar fell below
100 stores during its transition to ultraluxury.
John Hutter wrote the story and joins us now.
John, welcome back to Daily Drive.
Hey, great to be here.
So John, what's driving the shift toward more standalone stores?
There's kind of two things going on.
One is ongoing work, particularly by Buick, which is doing offering basically buyouts
to dealers who don't want to go to kind of its all electric plan for the future.
So as those Buick stores leave what had been a shared space, you see more standalone GMC
stores, but what a bit of Buick GMC is now just a GMC by itself.
So that's part of it.
And then the other brand to kind of watch there would be Genesis.
They're actively pushing for dealers to have, you know, to open new Genesis standalone
facilities and, you know, and move them out of what it had been, you know, joint Hyundai
Genesis locations.
And so those are the two major shifts going on on that front.
And which brands are seeing the biggest changes in their networks?
Well, Buick is, you know, Buick is certainly one.
They're down by quite a number of stores, just as dealers have kind of capitalized on
their program, taking the buyouts, things like that.
And so they're down, let's see, Buick's down by like more than 180 franchise points.
Again, intentionally.
And Lincoln is another one like that too.
They're in, they're also trying to drop the number of dealers that they have in their
network.
They've done buyouts in the past.
And so they're down nearly 10% from a year earlier, and they're trying to drop by another
by about 85 stores this whole year.
So those are kind of the two big ones to watch.
Jaguar's also losing a number of facilities because they're shifting to more of an
ultra luxury brand.
And so it fits better with that.
So again, it's all, you know, all of them are losing stores, but it's kind of with
the both the dealer and the automakers, you know, buy in, so to speak.
John Hutter, good stuff.
Thank you so much for joining me.
All right.
Thanks.
Coming up, a look at why the auto industry has been named the world's most disrupted
sector for the second year running.
And what that means for executives trying to navigate the chaos.
That's next on Daily Drive.
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Find out more and apply at autonews.com.
Welcome back to Daily Drive.
I'm Kellen Walker.
For a second consecutive year, the auto industry has been ranked as the most
disrupted sector in the world.
That's according to Alex Partners, 2026 disruption index.
And the upheaval is real enough that executives are genuinely worried about
their job security.
Dan Hirsch is the global co-leader of the automotive and industrial practice
at Alex Partners.
He joined our own Molly Boygon on the shift podcast to break down what's behind
this unprecedented level of industry turbulence.
Here's a piece of their conversation.
So we are here to talk about the 2026 Alex Partners disruption index, which
measures how different industry executives are thinking about disruption
across their sectors.
And what was your top line takeaway from the survey this year as far as the
auto industry goes?
Oh, yeah.
No, no surprise that anyone that lives automotive like we do, the automotive
industry is the most disrupted industry in our index on the planet.
And it's a mix of things that have been developing for a number of years, such
as the shift in technology toward the software defined vehicle, the introduction
of autonomy and ADAS features.
More recently, the significant disruption of the global supply chain, geopolitical
tensions and everything that's come along with that have really put a lot of
pressure on automotive industry executives, both with the OEMs and the tier one
suppliers.
And it's just left them in a position where many don't really know what to do.
It's hard to make long-term decisions when there's so much disruption piling up
on top of itself, like we've seen over the last 24 months.
Yes.
So as you said, the most commonly cited disruption threats from automotive
executives were from protectionism and tariffs, geopolitical conflict, inflation
slash consumer and producer price increases and interest rates and costs of capital.
One of the things that was interesting to me is, as you allude to, all of these
things are so interrelated and overlap so much.
How should auto executives be thinking about all of these different overlapping
forces and why is there so much fear around these things?
Why is there so much fear is because the frequency and the amplitude are both
just so much higher than they have been previously.
You know, we've developed kind of a view and tracked some of the large black swan
events would say that over a period of 20 years ago, you would have one every couple
of years and that is kind of developed into a few a year.
And what's really scary about them is just the way that they're hitting companies,
the way that they're hitting the market just defies planning.
It defies the ability to kind of predict where things are going to go
because they're so concentrated among just really a set of individuals.
They're not even large macroeconomic trends.
They're individual disruptors that are kind of pushing these things in many cases,
heads of state or administrations and not things that you can kind of plan for even
with advanced statistical models or artificial intelligence.
Yeah. And speaking of artificial intelligence, I also found it really interesting.
The survey found that the auto industry executives used AI as a tool for revenue growth
the most infrequently or I guess least frequently of any industry and instead
they're using it for cost reduction.
And I think that makes sense given everything that you just said,
all of these different pressures on the industry.
At the same time, it almost seems like a little bit of a sort of chicken and egg situation.
You know, as the industry is just sort of hunkering down and trying to figure out how
to reduce costs, it's also missing an opportunity to leverage AI for revenue growth.
So how did you read that finding?
Yeah, I think of it a little differently than the way it presents.
It's not that auto companies aren't using it, it's that the cycles are so long
that the use of AI today in product development or in anything other than maybe marketing and
sales is going to have an impact a few years from now.
Not now where you have consumer goods or restaurants and hospitality,
everything is much nearer term.
Those development cycles, those sales cycles are a couple of them per year versus an automotive.
It's once every few years is what you can really use AI to accelerate versus taking cost out
has an immediate impact on the bottom line.
That's really the difference. It really emphasizes how different the automotive
development cycle is than other consumer goods, even other consumer terms.
Got it. So more of a reflection of the different development timelines, different cycles for the
different types of businesses rather than sort of an organizational attitude or potential weakness
by the auto industry executives. Yeah, that's right. And the way you might think of it is,
okay, why aren't auto companies embedding AI in their vehicles? The fact is there's some of that,
but there's also real trust issue that a lot of consumers have with artificial intelligence,
both the accuracy of some analysis, but also handing over control of certain aspects of the
vehicle. That's somewhat scary, even to your everyday consumer that's driving a vehicle.
And then you don't have, most people don't buy a car every year or even every two years. It's a
longer cycle as well. And so the value that automakers believe they can get out of embedding
those types of features is much lower. And they're not willing to take the chance without
really vetting and testing these systems out and ensuring that they're not going to have
unintended consequences in terms of handing over control or just accidentally allowing
some type of AI feature to do something in the car that it shouldn't be able to do.
Those things really have to be well sorted out before they end up in a vehicle just because
of the risk to the owner and other people on the road if something does go wrong.
You can hear Molly Boygon's full conversation with Alex Partners,
Dan Hirsch on the Automotive News Shift podcast. That's available now, wherever you get your podcast.
That's Daily Drive for today. I'm Kellan Walker. Thanks to Automotive News Executive
Producer Jake Neer, as well as our own John Irwin and John Hutter for their reporting for
today's podcast. We also have reporting from Luca Shafferi of our sibling publication,
Automotive News Europe. You can get the latest news on tariffs, industry disruption,
and everything happening in the auto industry at AutoNews.com.
We'd love to hear from you. Let us know what you think of the show and the topics we covered today.
Send us an email at DailyDrive at AutoNews.com or leave us a voicemail at 313-444-2774.
And if you enjoy the podcast, remember to like, leave a review and subscribe so you never miss an episode.
About this episode
The episode covers the auto industry's exemption from President Trump's new 15% global tariff, providing relief to automakers and suppliers. Stellantis faces its first loss due to costly EV strategy write-downs, while dealership networks shift toward more standalone brand stores amid consolidation efforts. Alex Partners' Dan Hirsch discusses why the auto sector remains the most disrupted globally, highlighting challenges like geopolitical tensions, supply chain issues, and cautious AI adoption due to long development cycles and consumer trust concerns. The conversation offers insight into how executives navigate unprecedented industry turbulence.
